By Darren Waters
Technology editor, BBC News
2008 has seen a three-way tussle between console makers
Technology editor Darren Waters looks back at an eventful year in the world of game consoles.
At the start of 2008 there were three key questions that needed answering about the future of the games industry:
• Could the Xbox 360 sustain a lead over the PlayStation 3?
• Would anything derail the success of Nintendo?
• And could 2008's video games match the heights of 2007?
If you are reading this and pushed for time, then the short answers are Yes, No, Not quite.
At the start of the year the Wii was way out in front in terms of an installed base with 20 million machines in homes. By comparison the Xbox 360 was in 15.5 million homes and the PS3 nine million.
Analysts Screen Digest predicts that Nintendo will more than double its installed base of the Wii by the end of this year to 42 million, amplifying its lead over Sony and Microsoft.
The Byron review highlighted worries over game ratings
Piers Harding-Rolls from Screen Digest said Nintendo had enjoyed a "fantastic year".
"The Wii has maintained its price and they gain a profit from every bit of hardware sold," he added.
But a significant slowdown in sales in November and December in Japan points to a trickier 2009 for the company in which it may not enjoy the same blockbuster success.
The picture in 2008 was mixed for Sony and Microsoft, he said.
"The 360 and PS3 have performed fairly similarly, with just a few hundred thousand units difference over the year between them."
Screen Digest predicts that the PS3 will have an installed base of 19 million by the end of 2008, while the 360 will have 24 million.
"When we looked at the 360 at the beginning of the year we didn't think it was going to do as well as it has done."
An aggressive price cut and marketing campaign across Europe has seen the 360 do well in traditional PlayStation heartlands around the continent.
By contrast, the lack of a price cut for the PS3 combined with difficult economic circumstances for many consumers has seen the console fail to ignite as some predictions foretold.
"We think there have been corporate pressures to aim towards profitability," said Mr Harding.
"They are pretty exposed on price. Adoption has slowed and will be delayed.
He added: "We always felt that 2008 was the year that PS3 kicked off - but we think that will now be 2009."
This year was always going to be one of transition and development, rather than shock and awe. With no new consoles or significant hardware launches, the focus was firmly on hardware sales and software development.
The first big industry event of the year was the publication of the Byron report. In it, Dr Tanya Byron won the praise of many developers and publishers for highlighting the positive impact of gaming on children, but sparked a row which has yet to end over how games should be classified.
LittleBigPlanet was eagerly awaited by PS3 owners
Should it be the BBFC's role as an independent classifier, or self regulation through PEGI? Dr Tanya Byron seemed to be on the fence when she suggested a dual approach.
This infuriated all sides involved in rating games and it is still not clear how games will be classified in the future.
In June, E3 returned to its spiritual home of the Los Angeles Convention Center. But the more sombre and professional approach to a trade show only succeeded in making the event seem cheap and second rate.
There were few highlights from the show. Microsoft showed off its New Xbox Experience, a new front end and UI designed to take the best bits of the existing system and replicate the success of Nintendo's family-friendly Mii approach.
Sony's pitch was all about emphasising the long game. "Don't judge us now; judge us in 10 years," was the mantra, as Jack Tretton, head of PlayStation's US business, told the audience: "It took some time for mass market migration from PlayStation to PlayStation 2."
At least Sony had some decent games to finally talk about, including Resistance 2 and LittleBigPlanet.
Nintendo's press conference was the biggest disappointment - Wii Music garnered groans and sales on release have confirmed the limited appeal of the title, there were no updates on a new Zelda or Mario game, and the Japanese giant seemed to be resting on its laurels.
The UK games industry enjoyed mixed success in 2008.
Two of the biggest releases of the year, LittleBigPlanet and Fable II, were home-gown titles, but the financial pressures on developers were reflected in the closures of firms such as Pivotal Games, Sega's Racing Studios and NCSoft's European development office in Brighton.
Gears of War 2 was a favourite among FPS fans
And with the end of the year approaching it seemed that the most high profile closure would be Free Radical, the makers of Haze and TimeSplitters.
On the content side, the big winners of plaudits were Gears of War 2, Fable II, Dead Space and Fallout 3.
Games like LittleBigPlanet and Mirror's Edge continued to prove the level of vitality and creativity that remains in the industry.
But modest sales for the latter showed that gamers' tastes may be more narrow and limited than are suggested by opinion polls - which often decry the sequel-heavy nature of gaming.
Looking forward to 2009 I expect a few of the following questions to be answered:
• Will Killzone 2 disappoint after a protracted development cycle and endless hype?
• Can Heavy Rain really offer the narrative freedom that the developers seem to suggest?
• Will Xbox Live in Europe start to offer decent film and TV content or will it continue to be second rate?
• Do we really need a next-gen version of Wolfenstein?
• Has Bungie squeezed every last drop of creativity from Halo or will Halo 3: ODST prove there's more left in the tank?
• Can the community-developed recreation of Half-Life, Black Mesa, really be as good as the trailer suggests?